EaseMyTrip IPO: Promoters look to offload 25% stake through share sale

The promoter family, which holds 100 per cent, is looking to offload 25 per cent stake through the share sale.
Online travel portal EaseMyTrip has revived its listing process, which had been halted because of the pandemic.

Started in 2008 by brothers Nishant, Rikant, and Prashant Pitti, it will become the first online travel firm to be listed in India.

The promoter family, which holds 100 per cent, is looking to offload 25 per cent stake through the share sale.

A person aware of the development said the company plans to close the IPO process by March-end, and expects to raise Rs 500 crore. “Failure to launch the share sale by March-end means it will have to revisit the entire process, including a fresh filing of its draft prospectus, which will stretch the listing plans by several months,” said the person, adding that the firm expects a good response given the buoyant market.

Shares of all companies to have gone for an IPO this year have provided returns way over their issue price, reflecting the rebound in the equity benchmarks since the worst sell-off in more than a decade.

At present, two Indian online travel companies — MakeMyTrip and Yatra — are listed on the Nasdaq.

It began dealing directly with customers in 2011, working on incentives such as a waive-off in convenience fee charged by other agents, and offering 6 per cent savings on ticket prices.

Earlier this year, it secured an expansive partnership with Jet Privilege — the loyalty programme of defunct carrier Jet Airways — to power its booking and earning miles, as it diversified to other airlines after Jet’s shutdown.

EaseMyTrip also powered bookings on Paytm’s air ticket booking tool for a year.

“The company recovered 70 per cent of its booking volumes during the third quarter, much ahead of the industry average. 

Others have recovered 40-45 per cent of their business,” said a travel industry executive.

Easy Trip Planners recorded the highest growth in gross booking revenues among key online travel aggregators, with a compound annual growth rate (CAGR) of 47 per cent during FY18-20.

MakeMyTrip grew at a CAGR of 20 per cent, followed by Yatra Online at a CAGR of 4 per cent, in terms of annual growth in gross booking revenues during the same period.

In terms of net profit margin, Easy Trip Planners was the only profitable player in FY18, FY19, and FY20, with net profit margin of 10 per cent, 24 per cent and 23 per cent, respectively.

Analysts tracking the sector said that while online travel agencies had minimal hold on the travel market, the changed paradigm in the aftermath of Covid-19, which has seen a higher usage of OTAs for bookings, may help well-entrenched companies.

“Covid, in our view, will tilt market share in favour of well-capitalised bigger companies and limit cash burn. This may push the sector to profitability after almost a decade of intense competition,” said Bank of America in a recent research report.

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